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GBP/JPY is stepping lightly in Asia markets, fidgeting around 150.42 following a flat Monday.The pair has had a rough go of things lately, closing lower or flat for six of the last seven trading days. With the threat of interest rate increases looming on the horizon, traders have been flighty and prone to fits of risk aversion, dumping equities and risk assets in order to pile into safe havens. With the UK showing steady upticks in economic growth and the Bank of England (BoE) preparing to begin tightening their monetary policy, the era of easy money for global markets is set to end, leaving risk appetite in a precarious position.The UK will be dropping their CPI data today at 09:30 GMT; a slight contraction in price growth is anticipated by market forecasts, with analysts calling for a 2.9% reading compared to the previous 3.0%.

The bears regained control after a brief recovery seen in the USD/JPY pair, now pushing the rates southwards in a bid to print the lowest levels since November 2016.USD/JPY headed to 107.00The spot is seen replicating the moves witnessed in Asia a day before, as risk-aversion seeps back into markets, with the Asian equities crumbling again alongside oil prices. Japan’s benchmark index, the Nikkei 225 sinks nearly 0.90% to 21,053 points while Treasury yields dive across the curve, in turn adding to the downslide.The major also faces a double whammy from broad-based US dollar weakness, as the buck tracks Treasury yields lower amid a sense of caution ahead of the key US CPI figures, which are likely to shape up the Fed’s rate hike outlook this year.Meanwhile, the JPY markets appear to have shrugged off the disappointment in the details of the Japanese Q4 GDP report, which showed that the preliminary Q4 GDP arrived at 0.1% q/q vs. 0.2% expected.

The technical recovery in the USD/JPY pair fell apart at 106.89 as the Japanese Yen picked up a bid after Japanese Finance Minister Aso played down the need for FX intervention.Speculation has been gathering pace that Yen appreciation may not go down well with the authorities in Tokyo. However, Aso’s comments indicate the policymakers are comfortable with the recent appreciation of the Japanese Yen.So, for the time being, the JPY bulls have little reason to fear. That said, the technical charts show oversold conditions. The daily RSI has hit the oversold territory. Further, risk reversals have diverged from the spot, indicating a drop in the premium claimed by JPY calls (bullish bets) over JPY puts (bearish bets).Also, the 10-year treasury yield continues to rise and more importantly the US stock market has remained resilient. Hence, caution is the name of the game for the JPY bulls.

EURUSD Technical Levels - 23.02.2018
EUR/USD has shown a decent recovery after a three-day continuous selling. The pair hits high of 1.23500 after ECB minutes meeting and once again started to decline from the high. It has declined till 1.22798 and is currently trading around 1.22965.
ECB minutes showed that it was premature to signal policy normalization due to weak inflation. The policy divergence between Fed and ECB shows that dollar is expected to strengthen further.
The pair is facing the near-term resistance of 1.2375 (20- day MA) and break above will take the pair till 1.2442 (61.8% Fibo)/1.2500. Bullish continuation can be seen above 1.2550.
On the lower side, near-term support is around 1.2275 and any violation below will drag the pair to next level until 1.2200/1.2165. Minor weakness can be seen only below 1.2200.

On the daily chart EUR/USD, bulls are trying to return the pair within the upward channel. If they succeed, the pair will be able to continue rising as well as 161.8% and 224% targets of AB=CD patterns will be implemented. Vice versa, when fail, bears will be able to count on the activation of the “Broadening wedge” and “Double top” patterns. In this scenario, the possibility of the continuing correction in the direction of 1.2095 and 1.1965 is high.

On H1 of EUR/USD, bears are going to break supports at 1.2235 and 1.2205.

The Kiwi is on the upside in the early Monday session, testing up into 0.7320 in the Tokyo markets.The NZD/USD has been climbing steadily in March, following commodities higher in the face of the ongoing trade war risks spurred on by Donald Trump’s steel and aluminum import tariffs. Little data is slated for the Kiwi for the first half of the week, but the Business PMI on Thursday may give Kiwi bulls something to think about, depending on how the US Monthly Budget Statement goes over today at 18:00 GMT.The top is getting taken off of risk assets in the Asia session as the Japanese political drama continues to unfold. Japanese Prime Minister, Shinzo Abe, may have sold government land at a steep discount to a school operator with ties to Abe’s wife, and allegations that Finance Minister Aso forged documents related to the sale of the land are beginning to fly along the wires.

Euro looks north as trade war fears flare again.
Focus on Draghi speech.
Dismal US data could yield stronger rally to 1.25.
The common currency nudged higher in Asia, pushing the EUR/USD to a four-day high of 1.2412, courtesy of turbulence in Washington and increased fears of full-blown US-China trade war.

China may retaliate by taking strong measures

In past trade confrontations with the US, China has often backed off, according to a Reuters report. But this time the world’s second-largest economy may retaliate with tariffs that hurt US agriculture and manufacturing sector.
Euro could move above 1.2446 (March 8 high) if China responds with strong words to news of broader US tariffs on Chinese imports.

Draghi will likely sound dovish

ECB’s Draghi, scheduled to speak at 08:00 GMT, will likely reiterate, there is no urgency in removing accommodation given the lack of inflation pressure. The Eurozone will also see ECB’s Praet speech at 8.45 GMT. Industrial production and employment change data for the Eurozone is due for release at 10.00 GMT. ECB’s Coeuré will wrap up the day with a speech at 16.15.

Kiwi bounced off the ascending 5-day moving average.
Ignores risk-off mood in stocks.
The GDP-led drop in the NZD/USD was short-lived.
The NZD/USD pair found takers below the ascending 5-day moving average of 0.7311 and recovered to 0.7325 – a level seen ahead of the NZ GDP release.
The recovery from the session lows is somewhat surprising, given the risk assets are under pressure due to rising fears of US-China trade war. As of writing, the stocks in Australia, Hong Kong, Japan are trading modestly weaker. Further, the S&P 500 futures are reporting a 0.16 percent drop.
Ahead in the day, the pair will likely track the broader market sentiment and may turn positive if the European desks offer US dollar in response to global trade tensions.
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